Assos moves in with Philip Morris

The lower and lower sales registered by the major cigarette producers on the Western markets have made them shift to the Central and Eastern European markets, including Romania. The Romanian market is worth approximately one billion dollars a year and is bound for growth, the analysts say. The latest example in this regard is Philip Morris International (PMI), division of the US-based Altria Group, which on Tuesday announced it was buying the controlling interests in Greek producer Papastratos.
The deal is worth 371 million euros and covers 76% in the Greek company, PM says.
Papastratos accounts for 1.5% of the Romanian market, according to certain surveys, which, at a first glance, makes the deal look insignificant for Romania.
The implications of this business, however, are rather related to the tradition of the Assos International cigarettes on the Romanian market. This brand had been known since as early as the ’80s and became very popular in the ’90s.
Papastratos’ $10 million investment in a factory in Bucharest is another thing that cannot be overlooked. PM is said to start using this factory, according to Anca Ioan, senior partner with Roland Berger Strategy Consultants.
Furthermore, the Greek company announced that Romania was its most important market in 2002, besides Ukraine.
Both the Papastratos and the PM representatives said it was too soon to be discussing possible implications of this deal at the local level or about the next steps the two companies would take. claudia.covaci@zf.ro